Un­der­stand­ing body cor­po­rate in­sur­ance a must ahead of win­ter weather dam­age

Weekend Argus (Saturday Edition) - - PROPERTY -

WIN­TER has only just set in, but Cape Town has al­ready ex­pe­ri­enced heavy rain storms that have left houses across the city flooded, ex­ten­sively dam­ag­ing roofs and win­dows.

Carl Smit, man­ag­ing direc­tor of San­dak-Lewin Prop­erty Trust, says that as ex­treme win­ter weather con­di­tions usu­ally re­sult in an in­crease in prop­erty dam­ages, home­own­ers need to en­sure that their in­sur­ance poli­cies are up-to-date in case they need to claim for dam­ages.

Ac­cord­ing to Smit, for those liv­ing in sec­tional ti­tle schemes, it can be as­sumed that the body cor­po­rate will have ad­e­quate in­sur­ance cover against weather-re­lated dam­age to the build­ing. How­ever, he says that in­di­vid­ual unit own­ers need to prop­erly un­der­stand what ex­actly is cov­ered in the body cor­po­rate’s pol­icy, and need to know how to claim for re­lated dam­ages should the need arise.

“Body cor­po­rate in­sur­ance cov­ers all build­ings in the scheme – in­di­vid­ual hous­ing units and com­mon prop­erty ar­eas such a pas­sages and lifts – and ap­plies to in­ter­nal and ex­ter­nal dam­age to units. For ex­am­ple, if a build­ing’s roof or win­dows are dam­aged, the body cor­po­rate in­sur­ance will pay out .”

Own­ers who are un­sure of the value to which their unit is cov­ered are en­ti­tled to re­quest the in­sured value of their prop­erty by view­ing the in­sur­ance pol­icy kept on file by the body cor­po­rate. If own­ers be­lieve that the amount that their units are in­sured for is not suf­fi­cient, they can re­quest that the cover be in­creased.

“This re­quest needs to be cou­pled with a rec­om­men­da­tion to the trus­tees to en­sure that the value of the en­tire build­ing is cor­rect, as body cor­po­rate rules re­quire that the scheme never be un­der­in­sured,” says Smit.

“For many own­ers, the con­fus­ing part is not the terms and con­di­tions of the in­sur­ance pol­icy but rather the process of claim­ing for dam­ages for re­pairs to com­mence. It’s the own­ers’ re­spon­si­bil­ity to ini­ti­ate claims through the body cor­po­rate. Tenants’ claims still need to go through the owner of the unit, who must sign off the claim be­fore it can be taken to the body cor­po­rate for pro­cess­ing. There­after, the claim must be signed off by the trustee or man­ag­ing agent to en­sure its le­git­i­macy.”

Smit says claims by own­ers should not be taken di­rectly to the bro­ker as the body cor­po­rate may be un­aware of the claim and the bro­ker may not know whether the per­son ini­ti­at­ing the claim is an owner in the scheme.

“Once the claim has been made, there is a chance that an ex­cess amount will be due, de­pend­ing on the pol­icy and level of dam­age. In this case, the ques­tion arises – who is re­spon­si­ble for the ex­cess pay­ment? Ac­cord­ing to the Sec­tional Ti­tles Act, the owner of the sec­tion who is ini­ti­at­ing the claim is re­spon­si­ble for the ex­cess pay­ment.

“If own­ers of sec­tional ti­tle units wish to ini­ti­ate ad­di­tional in­sur­ance through an in­de­pen­dent bro­ker to cover any fu­ture ex­cess pay­ments claims or ex­tend cover for ren­o­va­tions done to a unit, they are free to do so,” says Smit.

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